Ukraine

Malcolm Rifkind Excerpts

Tuesday 18th March 2014 Commons Chamber

[Mr Hague]

I must make some progress now.

Our national interest depends on a rules-based international system where nations uphold bilateral and global agreements in a whole variety of areas, from trade to security. We have worked with Russia in recent years to uphold agreements such as the non-proliferation treaty. The credibility of the international system rests on there being costs attached to breaking binding commitments and refusing to address disputes through peaceful diplomacy. The door to diplomacy, of course, always remains open, as it has been throughout this crisis. We have in recent days continued our efforts to persuade Russia to enter into direct talks with Ukraine and to take part in an international contact or co-ordination group, but faced with these actions it will be necessary to increase the pressure and our response.

Following the invasion of Crimea, the European Union took action at the Council meeting on 6 March to suspend visa liberalisation talks and talks on a new EU-Russia co-operation agreement. The Council also agreed that unless Russia de-escalated the crisis, we would move to a second stage of sanctions, including travel bans and asset freezes against named individuals. Yesterday, the Foreign Affairs Council in Brussels, which I attended, decided to introduce such measures, including travel restrictions and an asset freeze on 21 individuals, not just in Crimea, but in Russia. These people are responsible for actions that undermine or threaten Ukraine, and the measures have been taken in close co-ordination with the United States and allies such as Canada, Japan and Australia. Preparatory work is under way for a third tier of sanctions, including economic and trade measures. The European Council will consider further measures later this week, in the light of President Putin’s speech today and Russia’s actions in recent days. The British Government are clear that further measures need to be taken and, in the light of President Putin’s speech today, we will argue at the Council for the strongest position and range of measures on which agreement can be obtained in the European Union.

[Sir Malcolm Rifkind (Kensington) (Con)]

The most important thing the Foreign Secretary has just said is that the further measures the United Kingdom will be seeking will include economic and trade sanctions against Russia because of its annexation of Crimea. Will he confirm that that is indeed the case, and that the UK will seek financial sanctions and economic sanctions against Russia, and seek to persuade other countries to go down that route?

[Mr Hague]

Let me be precise about what I said. I said that the preparation is under way for a third tier of sanctions. The Prime Minister said after the last European Council that we must be ready to pursue far-reaching measures, including in the economic, trade and financial areas. I have also said today that at the Council, which takes place on Thursday and Friday this week, the Prime Minister will argue for the strongest position and range of measures on which agreement can be obtained. That is the position I have set out.

--- Later in debate ---

[Sir Malcolm Rifkind (Kensington) (Con)]

The crisis we are living through is a crisis not just for Ukraine but for every European country, including the United Kingdom. For the first time since 1945, a European state has invaded the territory of another European state and annexed part of its territory. The Foreign Secretary, the Prime Minister, President Obama and other European leaders have stressed, as has the shadow Foreign Secretary, that this is a crucial moment in the history of Europe. That fine rhetoric will be justified only if it is matched by our response to what is happening and what could still happen. Sadly, the measures on visa controls and asset freezes for individuals, which have been announced by both the United States and the European Union, are a pathetic and feeble response. They do not match the seriousness of the situation, which those implementing the responses have acknowledged that we face at the present time.

The issue is not simply one of Crimea. Crimea is of no strategic importance to Russia—Sevastopol is important but it has had control of Sevastopol for years. The Russian objective is effectively to control all the areas of the former Soviet state, not necessarily by reintegrating them into the Russian Federation but by ensuring that they become Russian dependencies. That will happen because we have seen already that the response to the measures announced so far has been one of contempt by Moscow, and that could continue if we do not respond more robustly.

The only way in which we can effectively hope to have a significant impact on Mr Putin's thinking is through financial and economic sanctions. That approach has become much more effective in recent years. We know that Iran is at the negotiating table because of the success of the financial and banking sanctions it has experienced. Dare I say it, but the United Kingdom withdrew from Suez because of the United States’ threat of financial sanctions against this country—a threat that was very effective even many years ago.

The Russian economy is not the Soviet economy. It is much more integrated and I noted with some interest that the chairman of Gazprom apparently sold all his shares in the company some days before the crisis reached its peak. Financial sanctions will not change the world, but Putin would have to live with a Russian economy in which no other part of the world would invest and in which billions were coming off the Russian stock exchange. The crucial ingredient is access to the world financial markets, particularly the financial markets of this country, of Europe and of the United States.

I listened with great interest to my right hon. Friend the Foreign Secretary and I was encouraged when he said that the further measures for which the British Government will be pressing will be economical and in trade: they have to be, and they have to include financial sanctions. Of course, one cannot impose sanctions against another country without accepting some difficulties for oneself. I was encouraged that the Financial Times, of all newspapers, given its normal clientele, said this morning in its editorial that the Europeans

“must decide whether it attaches more importance to its international credibility than its commercial interest.”

I believe that that is a proper reflection of the measure of events.

We must also face the crucial question of what happens if the British Government are robust—I hope that they will be; in the light of what the Foreign Secretary has said, perhaps they are being robust, but I shall wait to see what happens—but cannot get the agreement of some other European countries. What will happen if they remain, in my words, feeble in their response? Western unity is important—I do not doubt that—but western action is even more important. If, at the end of the day, we cannot get unanimity, I would want to see the British Government, as well as, I hope, the American Government and those of a range of European countries, imposing financial sanctions, even if we cannot get full unanimity in the international community.

We must ensure two things. First, Mr Putin must feel financial pain in the Russian economy because of what he is doing. Secondly, we must be able to look ourselves in the eye and say that we did all that we could, all that was reasonable and all that was available to us to ensure that the horrors of the 1930s were not repeated, not in exactly the same form, but in a form that will damage European security and stability for a generation to come.